Tax-free relief for Hurricane Melissa recovery payments to employees now effective
/ Our Today
administrator
Tax Administration Jamaica (TAJ) is advising employers and employees of the implementation of the Government of Jamaica’s tax-free relief on emoluments paid by employers to employees who were impacted by Hurricane Melissa.
This measure, which is now in effect, is intended to provide meaningful financial support to employees as they undertake personal recovery and welfare efforts following the effects of the Category 5 hurricane. Following the recent policy change, employers may make cash payments to employees, not exceeding an aggregate amount of $200,000, which will be treated as tax-free.
These payments must be made during the period November 1, 2025, to March 31, 2026 and must be specifically for personal recovery and welfare arising from loss or damage suffered as a result of Hurricane Melissa. Under this provision, qualifying payments will not be subject to PAYE, Education Tax, National Insurance Scheme (NIS) or National Housing Trust (NHT) deductions, nor will they attract employer contributions.
Employers will also benefit from treating such payments as an allowable deduction for tax purposes. Payments may be made either as a one-off payment or as a series of payments over the five-month period, provided the total does not exceed $200,000 per employee. It should be noted that this relief applies only to cash payments.
Gifts in kind do not qualify and will remain subject to taxation. Any amount paid in excess of $200,000 will be treated as taxable emoluments and will therefore attract the applicable statutory deductions and employer contributions.
Employers are advised that they must retain proper records of all qualifying payments made and must ensure that employees receiving the relief were on staff prior to the impact of Hurricane Melissa.
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